The euro continues to face growth challenges, while the pound maintains a strong position against the US dollar.

Yesterday's negotiations between Russian and US representatives did not succeed in restoring strong demand for risk assets. Although investor concerns have eased somewhat, the lack of progress in de-escalating tensions around Ukraine is discouraging new investments in risky assets. The market is reacting to every statement from officials on both sides, and so far, these statements have not indicated significant progress. In this environment, investors and traders are adopting a wait-and-see attitude, shifting their capital into more reliable instruments such as government bonds and gold.

Today, pressure on the euro may increase, especially if weak data is released regarding the producer price index in the eurozone, along with a negative forecast from the European Commission. Conversely, if the data surpasses expectations or the European Commission presents a more optimistic economic outlook, the euro could receive some support and attempt to recover some of its losses. However, given the ongoing uncertainty surrounding Europe's energy situation and the Federal Reserve's aggressive monetary policy, any recovery is likely to remain limited.

As for the pound, despite concerns about a potential global trade war between the US and the rest of the world, demand for the currency remains strong. Yesterday, US President Donald Trump announced the possible introduction of tariffs of around 25% on imports of automobiles, semiconductors, and pharmaceuticals. However, investors buying the pound largely ignored this statement. Optimism around the British currency may be fueled by expectations of monetary policy easing by the Bank of England, but this will depend on today's inflation data from the UK. Key reports include the Consumer Price Index (CPI), Core CPI, and the Producer Price Index. Only a sharp decline in price pressures would allow the BoE to continue cutting rates without concern.

If the data aligns with economists' expectations, the best strategy is to operate based on the Mean Reversion strategy. The Momentum strategy is preferable if the data significantly exceeds or falls short of expectations.

Momentum Strategy (on breakout):

EUR/USD

Buying on a breakout above 1.0470 could lead to a rise towards 1.0512 and 1.0554.

Selling on a breakout below 1.0445 could push the euro down to 1.0414 and 1.0376.

GBP/USD

Buying on a breakout above 1.2630 could lead to a rise towards 1.2664 and 1.2692.

Selling on a breakout below 1.2595 could trigger a decline towards 1.2550 and 1.2515.

USD/JPY

Buying on a breakout above 151.90 could drive the dollar up to 152.42 and 152.82.

Selling on a breakout below 151.70 could result in a sell-off towards 151.35 and 151.05.

Mean Reversion Strategy (on pullbacks):

EUR/USD

I will look for sell opportunities after an unsuccessful breakout beyond 1.0458, upon a return below this level.

I will look for buy opportunities after an unsuccessful breakout beyond 1.0441, upon a return to this level.

GBP/USD

I will look for sell opportunities after an unsuccessful breakout beyond 1.2630, upon a return below this level.

I will look for buy opportunities after an unsuccessful breakout beyond 1.2605, upon a return to this level.

AUD/USD

I will look for sell opportunities after an unsuccessful breakout beyond 0.6379, upon a return below this level.

I will look for buy opportunities after an unsuccessful breakout beyond 0.6339, upon a return to this level.

USD/CAD

I will look for sell opportunities after an unsuccessful breakout beyond 1.4202, upon a return below this level.

I will look for buy opportunities after an unsuccessful breakout beyond 1.4169, upon a return to this level.